Gas prices reaching new highs

AAA spokesman says supply, demand reason for increase

AAA spokesman says supply, demand reason for increase

May 22, 2007|By Emily Arthur-Richardt, American News Writer

Gas prices continued to reach record highs Monday as more motorists headed to the pumps. The national average on Monday, $3.196 for a gallon of regular unleaded gasoline, was the highest recorded in U.S. history, according to AAA's Fuel Gauge Report. In South Dakota, the average price was $3.345 - also a new high. And in Aberdeen, a gallon of regular unleaded fuel set motorists back $3.399. In comparison, one year ago in Aberdeen, the price for a gallon of regular unleaded was $2.819. In January, the price dipped below $2. Mark Madeja, regional spokesperson for AAA, said the cause of the increase was a common culprit - supply and demand. “That's what it always boils down to, and it's getting worse,” Madeja said. “When the oil refineries did their seasonal maintenance recently, they had a slew of problems. There were fires and other maintenance problems. They got behind in their production abilities and have not been able to keep up.” When prices will begin to stabilize has a lot to do with how much product the American public continues to use, Madeja said. While gas prices have increased, so has the number of motorists taking to the road. The AAA projects that 38.3 million Americans will travel 50 miles or more from home this Memorial Day, an increase of 1.7 percent from last year. “I think the sticker shock was more significant after we hit $3.05 after Katrina and Rita,” Madeja said. “For some reason, people don't seem as concerned.” Still, there are a few out there, said Mark Weigel, the owner of Aberdeen Taxi Co. in Aberdeen. Weigel said he's noticed a few more people using his taxi service in the last couple of weeks. The increase in numbers helps balance out what the company is now paying for in gas, he said. “It's a crunch financially for everybody,” Weigel said. “Everything in the grocery stores has gone up; all prices for everything are going up.” Despite the increases, Weigel said he doesn't plan to raise prices as a way to offset fuel costs. “We're not going to panic right away,” Weigel said. “We've been in business for more than 20 years, and we've only raised rates twice. ... We're trying to keep it economical for lower-income people.” As Ray Studnicka filled up a gas tank Monday in Aberdeen, his thoughts were on mowing his lawn, not on the prices. “The way things are going, it's no longer sticker shock to me,” said Studnicka of Aberdeen. “It's becoming a fact of life with everything that's going on in our world.” Studnicka said the high prices haven't affected him too much, yet. “It hasn't changed anything yet in (my) household," he said. "If it gets to $5 a gallon though, it might.” Madeja hopes it won't get to that point; however, he would like to see a new energy bill to guarantee it doesn't. “I'm certainly hoping we'll see a price retreat,” Madeja said. “We certainly never imagined we would be where we are now. ... It's a good time to ask oil companies and (Congress) how high prices will go. Those people who have the authority to make decisions are the ones who need to start feeling the heat over these issues.” Online: www.aaa.com